Why RTO & Returns Hurt So Much

When an order becomes RTO:

You lose:

• Forward shipping cost

• Return shipping cost

• Packaging cost

• Payment gateway fees (sometimes)

• Time & operational effort

And sometimes, product damage.

Reducing RTO by even 5% can massively improve margins.

Step 1: Strong Order Confirmation Flow (Especially for COD)

Most fake orders happen in COD.

Instead of blindly shipping:

✔ Use Multi-Step Confirmation

Step 1: Instant WhatsApp Confirmation
“Hi [Name], please confirm your order of ₹999.
Reply YES to confirm.”

Step 2: SMS Reminder (If No Reply)

Step 3: Auto-cancel after 12–24 hours if unconfirmed

This alone can reduce fake COD by 20–40%.

Step 2: Offer Prepaid Incentives

Many buyers choose COD because of trust, not preference.

Encourage prepaid with:

• ₹20–₹50 discount for UPI

• Free shipping on prepaid

• Faster dispatch promise

• Small free gift

Even shifting 10–15% COD to prepaid reduces RTO significantly.

Step 3: Address Verification Before Dispatch

Common RTO causes:

• Wrong phone number

• Incomplete address

• Fake pincode

• Non-serviceable area

Before dispatch:

1. Validate pincode automatically
2. Check phone number format
3. Flag suspicious high-value COD orders
4. Block repeat RTO customers

Basic filtering prevents loss.

Step 4: Choose the Right Shipping Partner

Not all shipping partners perform equally.

Evaluate based on:

• RTO rate by courier

• Delivery success rate

• NDR (Non-Delivery Report) handling

• COD remittance speed

• Serviceability in Tier 2/3 cities

Sometimes paying ₹10 extra per shipment saves far more in reduced RTO.

Step 5: Act Fast on NDR (Non-Delivery Reports)

When courier marks:

• “Customer not available”

• “Address issue”

• “Refused delivery”

You must act within 24 hours.

Use:

• Automated WhatsApp reattempt message

• Call confirmation

• Address correction form

Delays increase RTO probability.

Step 6: Improve Product Clarity to Reduce Returns

High return rate often means:

• Wrong expectations

• Misleading images

• Size confusion

• Quality mismatch

To reduce returns:

1. Add clear size charts
2. Add product demo videos
3. Mention material details
4. Show real images
5. Display return policy clearly

Better clarity = fewer disappointments.

Step 7: Track RTO & Return Data by SKU

Not all products cause equal problems.

Track:

• RTO rate per SKU

• Return reason breakdown

• COD vs prepaid RTO difference

• Region-wise RTO data

If one SKU has 30% return rate — fix or remove it.

Data saves money.

Step 8: Create a RTO Risk Score System

Flag orders that include:

• First-time buyer

• High-value COD

• Suspicious address pattern

• Same number multiple orders

These can require manual confirmation before shipping.

This reduces fraud.

Step 9: Improve Delivery Communication

Many RTOs happen because:

Customer didn’t pick call from courier.

Send delivery-day message:

“Your order will be delivered today. Please keep phone reachable.”

Simple reminder increases success rate.

Step 10: Offer Easy Exchange Instead of Return

In fashion especially:

Instead of refund:
Offer size exchange.

This reduces refund outflow and keeps revenue.

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